However, the new data also determined that real house prices are 37 percent below their housing boom peak in August 2006 and 11 percent below the level of prices in January 2000. And while average household income grew 2.9 percent since September 2017, consumer house-buying power was down by 6.7 percent over the same period—a situation fueled by rising mortgage rates.

“When household income rises, consumer house-buying power increases,” said Mark Fleming, Chief Economist at First American. “When mortgage rates and house prices increase, consumer house-buying power decreases. The 30-year, fixed-rate mortgage and the unadjusted house price index increased by 0.8 and 7.5 percent, respectively. Even though household income increased 2.9 percent since September 2017 and boosted consumer house-buying power, the Real House Price Index increased 15.3 percent compared to last September, the highest yearly growth rate since 2014.”